Incentives programs help transform consumption and costs

This Spring Minnesota consumers could apply for a rebate if they purchased an appliance under the Minnesota trade-in and save appliance rebate program. The program was funded with more than $5 million in Federal Stimulus funds and enabled some 25,000 Minnesota households to earn up to $200 for replacing their refrigerator, freezer, dishwasher, or clothes dryer with a qualifying Energy Star model purchased from a Minnesota retailer.

On rebate program launch day, Jeff Haase, who is with the Energy Efficiency Program of the Minnesota Department of Commerce, the Office of Energy Security; Julie Ketchum, Director of Government Affairs at Waste Management, Inc.; and Julie Warner, marketing director at Warner Stellian company joined me and co-host, Nghi Huynh, president of Minnesota Multicultural Media Consortium, to discuss how Minnesota reaches our communities of color on energy matters.

Nghi Huynh: We have to make an effort to reach out to people but also we have to create the opportunity to train them to understand the issue. So we need to work with government agencies and companies to provide more educational training programs for our communities. Minnesota should engage our ethnic media to serve as a bridge to communicate about opportunities, research and the news to our audiences and listeners.

Jeff Haase: This rebate program was a first-come-first-served program. The challenge that we faced was how to spend the five million dollars and no more, because that was the budget that we had to work with. And so we were running the program essentially until all the funds were exhausted.

Al McFarlane: There is a bigger awareness mission, isn’t there. Though rebate funds are limited, getting Minnesotans to be aware of energy consumption challenges is what this is really all about, right?

Jeff Haase: Yes. For example, people buy new appliances and the old refrigerators get shifted down to the basement or shifted out to the garage. They might sit there with several cans of soda in them. It’s easy to forget about it. It’s easy to get into the habit of just, ‘oh well, you know, throw this down in that second fridge.’ And you forget about it.

And the reality is that those cases of soda are costing you a good deal of money over the year to keep them cool. So these programs are really trying to work with those customers who have secondary refrigerators and provide them with an incentive to get them decommissioned and to pull them off of the grid.

That’s how we are able to achieve some level of market transformation. Ever since the mid-80s the Federal Government has been developing codes and standards for these appliances. When you look at it from a national prospective, the amount of energy that’s being saved is something on the order of a 60,000 megawatt power plant. But we don’t realize those savings until we get rid of that old equipment and get the newer equipment that complies with new energy efficiency standards.

Julie Warner: For example, there are still some top load washing machine models that use a lot of water and don’t really wring out the clothes as much so you must to dry them forever. And they don’t clean very well. And then you have, high efficiency machines that may cost a couple hundred dollars more. But when you step up, you get that high efficiency, reduce energy consumption, and save money.

Al McFarlane: How about in refrigerators; what’s the difference in technology in refrigeration?

Julie Warner: Energy Star refrigerators have to be 20% more efficient now.

Al McFarlane: Do ranges come into this at all?

Julie Warner: They don’t. Cooking appliances are not rated by Energy Star because there is not enough differentiation among models in energy use.

Jeff Haase: I used to do some permits for power plants, pipelines, transmission lines. I really came to understand that the population of the state ultimately shoulders the burden of infrastructure. And when you are talking about building a power plant or building a transmission line, you often hear the “not in my backyard” response. No one wants a power plant. No one wants a transmission line running through their property, their land.

But the fact that is, by reducing the amount of energy that we are consuming incrementally, one household at a time, one appliance at a time, it does add up.

One of the major policy initiatives of Minnesota is to realize energy reductions that are equivalent to 1.5% of the total retail energy sales from all the utilities to all customers. And 1.5% does not really sound like a lot but it really is an enormous amount of electricity and enormous amount of natural gas that comprises that amount of energy.

Al McFarlane: What is the dollar value?

Jeff Haase: It’s hard to say exactly... because there is variability in costs from utility to utility. But what these programs attempt to do is to provide some incentives for customers when they are at the point of making a decision on an energy consuming appliance, to make a decision that is as efficient as possible. The incentives and rebates that are out there are a way of trying to bring that incremental cost of that technology down so that it does become more economical for the household.

Al McFarlane: Waste Management services are the end of line for everything. People don’t realize how big the industry is. We take it for granted. But Julie, what is the value that your company and your industry brings to community and society?

Julie Ketchum: Recycling is very important here in Minnesota. There are a lot of resources dedicated to recycling and it means jobs and economic development opportunities with new end markets coming online for a variety of materials.

Waste Management works with a variety of customers, but we are really focusing on those customers that generate a lot of waste in particular. For example, for a health care facility, we go in we look at what they are generating. We do a waste audit. We look at opportunities for waste reduction and recycling.

What that means in terms of the environment is that we are reducing the waste that these facilities are generating but we are also looking for opportunities for greater value-added services and turning what used to be a waste material into a new product or new end product. And so we are getting value from the waste but we are also, in essence and in an indirect way, creating jobs because these new end markets create new facilities, new ways of processing these different waste streams and you end up with needing people to do that.

So, in a nutshell it’s about reducing energy by recycling materials and not going out and harvesting or mining new materials. We use less energy when we recycle those materials, and we create jobs and spur economic development.

Our industry has gone through some hard times. But those commodities’ values are bouncing back. They’re rebounding and we are looking forward this year and seeing greater values for recycled material.